Two of the simplest are buying through a cryptocurrency exchange (such as Coinbase or Binance) or through an online broker (such as Robinhood or Public). To do so, you'll need to create an account at the stock exchange or broker, verify your identity and link a payment method, such as a bank account or credit card. Take our 3-minute quiz and talk to an advisor today. Founded in 1976, Bankrate has a long history of helping people make smart financial decisions.
We have maintained this reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in the actions to take next. While Bitcoin is still the largest cryptocurrency by market cap, it is no longer as dominant as it was in the early days of the cryptocurrency. Other alternative currencies, such as Ethereum and Solana, have grown in popularity, making the term altcoin somewhat outdated. Now that 15,000 or more cryptocurrencies are reported to exist, it makes less sense than ever to define the industry as “Bitcoin” and then everything else.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people achieve financial freedom through our website, podcasts, books, newspaper columns, radio programs and premium investment services. A cryptocurrency stock is any company that is involved in some way in the cryptocurrency sector. It could be a company like Tesla, for example, that has made significant investments in Bitcoin (BTC 0.01%). It could also be an organization like Nvidia that develops the technology behind the high-powered computers used during the mining process.
Or it could be a company like Square that allows merchants to accept cryptocurrency as a form of payment. The ProShares Bitcoin Strategy ETF (BITO 0.36%) does not invest directly in Bitcoin, but in futures contracts, which are derivatives of Bitcoin. This means that the performance of the ETF may not exactly align with the performance of Bitcoin because it is not directly backed by Bitcoin. However, in general, if Bitcoin performs well over time, this ETF should also work well.
The easiest way to get exposed to cryptocurrencies is to invest in the currencies that interest you. This is generally done through a traditional investment platform or cryptocurrency exchange. In simple terms, you need a place to buy it and a place to put it. The most popular place to buy cryptocurrency is cryptocurrency exchanges.
Here's how to start investing in cryptocurrency and the significant risks you should pay attention to. This can be ideal for sophisticated investors who can execute trades quickly or who have a solid understanding of market fundamentals, the market trend, and where it might go. However, it's important to understand that some trading platforms will charge a large portion of your investment as a commission if you trade small amounts of cryptocurrency. The most important thing, as with any potential investment, is to have a clear idea of the risks you are taking.
With the most popular currencies, including Bitcoin, you can buy fractions of a currency, so you don't need to invest thousands of dollars to get into the game. A safer option, then, is to invest a small amount of money in cryptocurrencies that are more likely to grow over time. So, only invest the money you can reasonably afford to lose and check that the rest of your portfolio is solid. First things first: If you're looking to invest in cryptocurrency, you should have all your finances in order.
And since the markets are open 7 days a week, there's more flexibility in deciding when you want to invest compared to traditional assets, such as stocks and ETFs. Transferring coins is also a multi-step process where even the smallest mistakes could mean losing access to investments forever. Investing in a Bitcoin ETF involves risks, so it's important to know what you're getting into if you decide to follow this path. Cryptocurrencies are a highly speculative area of the market, and many smart investors have decided to invest their money elsewhere.
If they believe that their cryptocurrencies are not properly secured, some operators choose to invest in a crypto wallet to keep their coins offline so that hackers or others cannot access them. Although some providers allow you to buy Bitcoin with a credit card, it's best to avoid incurring high-interest debts to invest in a risky asset such as Bitcoin. .